A new report issued by the education technology company Skillsoft found that the tech skills gap isn't improving. A staggering 76% of IT decision-makers report they're dealing with a talent shortage, while 54% report having an opening they can't fill. More than one-third have three or more open positions.
These shortages persist despite increasing salaries. Average salaries were up across almost all regions. Over half of IT professionals reported receiving a raise in the past year. Due to the extensive shortages in the tech industry, companies have to pay more to attract qualified developers.
The current situation puts businesses in an almost impossible position — there's not enough tech talent available in the U.S., and the talent that is available is prohibitively expensive. If you're in this position, you're probably considering hiring from offshore.
Hiring offshore developers may seem like the logical next step when domestic developers are in short supply or are too expensive. India is probably the first overseas country that comes to mind when hiring offshore developers. The country has a reputation for turning out intelligent, ambitious developers who can be hired for considerably less than comparable talent in the U.S.
There's no doubt that India has much to offer U.S. companies looking to fill the tech skills gap in their teams. However, there are also some significant challenges associated with hiring tech talent from India. This article will cover the benefits and disadvantages of hiring Indian developers so you can decide if it's right for your company.
The Pros of Hiring Indian Developers for U.S. Companies
India has an immense population, second only to China. It's also the most populous democracy in the world, making it a logical option for finding marketable, hardworking, skilled workers in many industries. Many industry giants such as Microsoft and CISCO offshore to India to provide customer support, develop new technologies, and develop products quicker. The advantages of hiring Indian developers include:
Cheap rates
Developers in the U.S. make around three times more than developers in India. The average salary for an Indian senior software developer is ₹1,400,000 ($17,013 USD) compared to the average salary of a senior software developer is $153,155 in the U.S.
The cost of living is significantly lower in India than in the U.S. or most European countries — for example, the price of rent is over 85% lower in India. Because of the lower cost of living, you can hire Indian developers for much less than you would pay a similarly skilled developer from the U.S. or Western Europe.
Big talent pool
With a population of 1.38 billion and a strong focus on STEM education, it's no surprise there's a large pool of tech talent flourishing in India. Although the U.S. currently has the most developers of any country in the world — 4.3 million — India is on track to surpass that number by 2024. You won't have any trouble finding qualified developers to perform in a variety of tech stacks if you decide to outsource to India.
English skills
English proficiency is an important factor when hiring foreign developers. Many computer programming and coding platforms function best in English. While it's possible to code in another language and translate, this usually isn't ideal. Additionally, the inability to communicate in a common language makes collaboration almost impossible.
Fortunately, many Indian developers are fluent in English. English is the primary language of most universities in India and English is a prized language skill highly promoted among Indian tech workers. According to the English Proficiency Index, India rates 6th out of 24 Asian countries and has a moderate proficiency rating.
The Cons of Hiring Indian Developers for U.S. Companies
Although India has a lot of benefits for hiring tech talent, there are some pitfalls to be aware of.
Painful time zone differences with the U.S.
One of the biggest challenges when working with Indian developers is the time difference. Both India and the U.S. span multiple time zones, so the exact time difference will vary depending on where you and your developers are located. For example, the center of the U.S. is 12 hours and 30 minutes behind the center of India.
This means live collaboration will be virtually impossible, significantly slowing down your progress. Putting together a lean, agile team will be extremely difficult when key workers are on an opposite schedule.
Cultural differences
The cultures of India and the U.S. can be vastly different. Some of these differences won't affect your professional relationship and can enhance the diversity of your business. However, if you don't understand all of the cultural nuances, you may run into misunderstandings that can be disastrous for your business.
For instance, it's considered impolite to say no to someone, so an Indian developer may tell you yes even if they can't or don't want to whatever you've asked. When discussing details with developers from India, be wary if they agree with all of your terms. Make sure they understand your expectations clearly and emphasize that you'd rather they tell you upfront if they can't do something or can't meet a deadline.
Another difference between the two cultures is how time is prioritized. In India, life moves at a slower pace, and relationships are prioritized over deadlines. Rigid schedules are less common in India than they are in America. Be clear about deadlines and schedules when working with developers from India.
India, like other Asian countries, relies on nonverbal contextual communication. People build relationships as part of doing business and often use emotion to communicate their ideas. They tend to favor an intuitive approach rather than a logical one and embrace the traditional way of doing things.
Variable quality
Although India has a reputation for producing talented programmers, there are still many subpar developers, just as you'd find in any other country. Among graduates of tier II and III colleges, only 31% could write compilable code.
India isn't immune from the tech skills gap the rest of the world faces, so it can still be challenging to find qualified developers — especially if experienced, top-tier talent is swept up by competitors.
Very saturated
Many foreign companies are outsourcing in India, so the market is competitive for finding, hiring, and retaining top talent. Be prepared for a lot of false starts and a protracted search when you're looking to hire developers, particularly mid-level or senior software engineers. India is experiencing many of the same problems as the U.S. when it comes to having enough tech workers, although on a smaller scale.
While India is home to a vast pool of developers, you may be competing for top talent, drawing out the hiring process and costing you more.
How to Hire Indian Software Engineers
Hiring developers remotely from another country can be challenging at best and overwhelming at worst. Before starting the process, do as much research as possible and break it down into concrete steps.
Write a comprehensive job description
A clear and explicit job description is imperative when hiring a software developer. Be as specific as possible to cut down on the number of responses from unqualified applicants. Starting with the title, use every word to craft a job ad that focuses on the skills you need. Instead of advertising for a software developer, list the programming language, such as "Golang developer."
List all of the:
- Skills
- Educational requirements
- Experience
- Job duties of the position
It's best to make this a bulleted list rather than a wall of text.
Also include:
- Expectations about working conditions
- Hours
- Daily responsibilities
Differentiate between must-haves and nice-to-haves regarding skills and qualifications.
Have realistic expectations for costs
Although hiring Indian developers is much cheaper than hiring U.S.-based developers, the savings are rarely as significant as you might think. There are often other expenses associated with hiring developers not included in salary estimates. Indian developers also usually expect at least a 30% pay increase when they change jobs, so keep that in mind when interviewing candidates.
It's reasonable to expect to pay one-third to one-half of what you'd pay for local developers. That should give you a buffer and account for any unexpected expenses you encounter along the way.
Conduct thorough remote interviews
When hiring someone from another country, it's crucial to conduct a thorough interview to find a good fit. However, because comprehensive interviews are time-consuming, prescreening applicants can save you time. There are a lot of platforms that offer prescreening services. At a minimum, you'll want to screen for applicable tech skills and English proficiency. An extensive coding test can help you avoid wasting time by eliminating applicants who don't have the minimum skill level.
After you've prescreened your applicants, a real-time Zoom interview will help you assess a candidate's communication skills and personality fit with your team. Even if you've tested applicants beforehand, it's a good idea to include a live technical interview to ensure the test results were accurate and see how they work on the spot.
Although hard skills are essential, don't forget to also interview for soft skills. You may want to include team members who will be working closely with your new developer in the interview. If a candidate doesn't mesh well with your team, it can create a lot of friction that will slow down everyone.
Where to find Indian software engineers
You have several options when it comes to finding software developers in India. You can go through outsourcing or offshoring companies or post directly to job boards. Many people confuse offshoring and outsourcing, but they're distinct concepts.
- Offshoring involves basing some or all of your business operations in another country. Traditionally, this would involve setting up a business in that country, building or renting office or production space, and hiring workers.
- Outsourcing is the process of hiring someone to do a job or perform a service, usually one that was done in-house. You can outsource through a company or do it directly with individuals.
Common offshoring centers in India
If you want to put together an entire team in India, an offshoring center may be a good option. Some of the most common offshoring centers are located in the following areas:
Bangalore
With a population of over 8 million, Bangalore is the third most populous city in India. It has a mature tech ecosystem and a large population of young, digital natives.
Hyderabad
Hyderabad is the capital and largest city of the state of Telangana. It's a major center for the technology industry and a popular option for outsourcing.
Chennai
Also known as Madras, Chennai is located on the Bay of Bengal in eastern India. It has a strong IT infrastructure and a lower cost of living than many other Indian cities.
Pune
Pune is emerging as a major offshore center. It's located in the western Indian state of Maharashtra and is near Mumbai.
Chandigarh
Chandigarh is the capital of the northern Indian states of Punjab and Haryana. Known as "The City Beautiful," partly because of its picturesque mountain views, Chandigarh is an emerging outsourcing hub.
Outsourcing companies
If you aren't ready to set up your own offshore center, using an outsourcing company may be a more appealing option. Outsourcing companies can work with you to hire only the talent you need when you need it. Unlike offshoring, you don't have to commit to hiring full-time employees and setting up a presence in India.
Outsourcing can be a cost-effective option when you aren't sure how many developers you'll need or how long you'll need them. It can also be a good option for filling in gaps in your current team if you're having trouble finding tech talent.
Indian job boards
Just like in the U.S., you can post ads to job boards to attract developers directly. This is probably the most labor-intensive method. You'll have to handle all aspects of finding, hiring, and onboarding the developers yourself.
Indeed India
As with its American cousin, Indeed India lets you post ads for job seekers to respond to directly. It's free to post a basic job, although you can pay a fee to sponsor your posting and increase your profile.
Shine
Shine is the second-largest job portal site in India. It uses a two-way matching technique to help you find qualified candidates. There is no free option, but you can buy a subscription plan based on the number of jobs you want to post and how long you want to leave them active.
TimesJobs
Owned by The Times Group, a privately-owned Indian media conglomerate, TimeJobs is one of the largest job sites in India. You can either purchase access to a database of candidates in specific fields or post a job ad.
Expect a longer hiring process
Allow plenty of time to find a developer when hiring from India. If this is your first time hiring from overseas, it will take time to learn everything you need to know. This isn't something you want to start when you're desperate or in a hurry.
Even if you find a unicorn developer quickly, employees in India are expected to give a minimum of 30 days' notice before leaving a job, with some companies requiring 60 or 90 days' notice. You may be able to buy out an employee's notice in some circumstances, but you shouldn't count on being able to do that.
The more likely scenario is that it will take a while to figure out the logistics of hiring in a foreign country. On top of that, finding a qualified developer will probably be a protracted process. Finally, if you're hiring a developer away from a current employer, you should count on additional wait time.
Why you should consider Latin America over India for hiring developers
Although there are many talented developers in India, the obstacles to hiring them can be a significant deterrent. If you're looking for an easier way to hire offshore developers, you might want to look closer to home. Latin America may not be the first area that comes to mind when hiring tech talent, but it has a lot to offer companies looking for offshore software engineers. Some of the most notable benefits include:
Same or close time zones with the U.S.
Unlike India, Latin America is in the same or adjacent time zones as America. For example, Mexico shares Pacific Standard Time and Central Standard Time while Colombia shares Eastern Standard Time with the U.S. This compatibility means that you can collaborate in real time. You won't have to deal with the constant roadblocks of trying to communicate and collaborate with developers who are 10 to 14 hours ahead of you (as is the case with Indian talent). For companies embracing a lean and agile philosophy, this ability is critical to iterating and shipping quickly.
When working with Indian developers, the time difference will markedly increase costs in terms of wasted time and resources.
Similar cost-effectiveness
The cost of hiring developers from Latin America is similar to hiring them from India. The cost of living is dramatically lower in Latin America than in the U.S., so developers can afford to work for much less.
The average annual cost to hire Latin American software developers by country:
- Argentina: $101,083
- Brazil: $99,707
- Colombia: $101,400
- Mexico: $101,146
- Panama: $96,375
Cultural similarities
Latin American work culture is similar to the U.S. You'll have an easier time integrating developers from Latin America into your existing team. Most Latin American countries are very business-oriented and value innovation. While there will undoubtedly be some cultural differences, they aren't as likely to impact how you work and do business.
In addition to cultural similarities, Latin America has language similarities as well. Many countries in Latin America have a moderate to high English proficiency ranking.
If you do need to communicate in a foreign language, Spanish is a more approachable language for most Americans than Hindi, the predominant language spoken in India. Spanish is the second most common language spoken in the U.S., so you likely won't have to look far to find a speaker if you need one.
Large talent pool that is less saturated
Latin America may not have the reputation for churning out tech talent that India does, but many governments and private organizations have heavily invested in the tech ecosystem there. STEM education is a top priority in areas such as Chile and Argentina. Because of this, the number of qualified developers in Latin American countries is growing tremendously.
Tech accelerators are investing millions in local startups, encouraging a culture of innovation. Organizations like MIT aim to expand opportunities in Latin America by providing a formal framework and mentoring for startup companies.
Since Latin American countries don't have the reputation for outsourcing that India does, they're the ideal place to find talented developers in a market that is much less competition for tech talent. This is likely to change as the tech ecosystem in Latin America continues to grow, but now is the perfect time to find developers.
Best countries in Latin America for hiring developers
There are many countries in Latin America where you can find professional software engineers skilled in almost every tech stack, including:
Mexico
Mexico's tech infrastructure is in its infancy, but it's growing. Mexico has created 38 IT clusters throughout the country specifically to offer opportunities for remote working. These clusters provide reliable sources of electricity and internet service and the most modern, up-to-date equipment. Now is a great time to find reliable, skilled developers in Mexico.
Another advantage to hiring from Mexico is the country's longstanding relationship with the U.S. This reduces the possibility of cultural and linguistic conflicts. Mexico and the U.S. also have trade agreements that protect your intellectual property rights.
Colombia
Colombia has a well-established tech ecosystem home to over 5,000 tech companies. Medellin has the nickname of the "smartest city in the world" because of the prevalence of artificial intelligence. Colombia's STEM education initiatives are the opposite of rote-based, instead drawing heavily on interactive, problem-based methods designed to produce innovative problem-solvers.
Companies like Ruta N play an important role in producing Colombia's rich tech culture. This incubator launched The Creation Laboratory, with the goal of producing 800 prototypes.
Brazil
Brazil has a long history of investing in thriving tech infrastructure. The Brazilian Association of Technology Parks and Incubators, Anprotec, was founded over 30 years ago. It represents over 6,000 tech companies. Additionally, the Brazilian government gives tax breaks to companies working on tech innovations. This favorable tech climate has spawned over 90 tech parks that attract tech companies and research institutes.
Argentina
Argentina is shaking off its history of conflict and unrest to emerge as a leader in tech education. The government has heavily invested in schools and universities — which has paid off, as Argentina ranked 29th in education worldwide in 2020 above countries such as Saudi Arabia and Brazil. Argentina is doing even better when it comes to tech skills — the 2020 Coursera Global Skills Index (GSI) report ranked Argentina first in the world in terms of tech skills.
Argentina's goal is to be at the center of the "Fourth Industrial Revolution." Thanks to its dedication to education and building a robust tech infrastructure, it's well on its way to meeting that goal.
Uruguay
Uruguay is another emerging tech hub. The National Agency of Investigation and Innovation is a government organization created to support the startup and tech industry. Over 700 tech companies now call Uruguay home.
Uruguay is also investing in tech education with initiatives that provide free laptops and WiFi to students, allowing them to keep up with advancements in the global tech industry. Uruguay's pool of talented developers will only continue to grow as its tech ecosystem matures.
Hire Latin American developers with Revelo
Although there are a lot of undeniable advantages to hiring offshore developers, there are also a lot of moving parts to consider. The complications can seem insurmountable when dealing with cultural differences, ensuring that developers are qualified, navigating currency exchange, and complying with local labor laws.
Revelo simplifies the process of finding the best remote software engineers. Our all-in-one platform lets you find, hire, and manage the best global engineering talent all in one place. All of our developers are prescreened and guaranteed to have the skills you need. We also offer a 14-day trial, so you don't have to take on any risk.
We work with you to create a personalized experience for your team. We ensure your remote team feels just as valued as your in-house team, leading to greater retention rates and less turnover and roadblocks.
Your remote employees will work in a state-of-the-art office with perks and amenities where they can work alongside a community of their peers. They'll enjoy benefits that focus on their professional development as well as their physical and mental health. Our HR professionals handle all of the details relating to payroll, contracts, and taxes so you can focus on your business. Reach out to our team to find out how we can help you with hiring offshore developers today.
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